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DKK 400 million cut in investments

Press Release   •   Oct 11, 2004 12:07 CEST

Arla Foods’ Supervisory Board has approved an investment budget of DKK 1,256 billion for the coming year. This is approximately DKK 400 million below the previous two years’ levels.

”Falling milk prices have meant that the framework for the divisions’ investments has contracted,” said Deputy Managing Director Povl Krogsgaard. “Moreover, the budget is affected by the fact that the major investments under the five-year structural plan from 2001 have now been completed.”

Of the DKK 1,256 billion investment budget, DKK 407.6 million is allocated to projects under the structural plan while approximately DKK 847.9 million is being channelled into new projects. Together with the two domestic markets, the Production and Ingredients Divisions account for the majority of new projects.

A total of DKK 400 million is allocated to the Production Division which is currently implementing an expansion programme at Holstebro Flødeost.

In addition, the installation of new machinery in the packing hall is

designed to meet the markets’ requirements for new types of packaging.

Høgelund Dairy is also planning to introduce new packing lines as well as implementing other expansion plans. The same is the case with Taulov Dairy where the packaging warehouse, tower store and despatch are being extended.

The powder factory at Vimmerby.

The Ingredients Division accounts for DKK 303 million of the investment including the upgrading of a spray tower at Hoco. Like last year, however, the new powder factory at Vimmerby accounts for the major share of the investments.

With regard to the two domestic markets in Sweden and Denmark, the Sweden Division accounts for the largest share of the budget, DKK 277 million, while the Denmark Division is set to invest DKK 173 million.